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Zerolag MACD

Hi All/Jiva

like many I get confused with divergence and constantly switching the rules about in my head (so many things to know in forex, so little space in my brain!!)

therefore I always have indi's to help, I have recoded the zero lag MACD to also plot divergence.

to make it easier the defaults are based on the 5/10/5 macd, though everything can be changed.

a little picture below to help people visualise what i have done

Regards
John
Attached Image (click to enlarge)
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Attached File(s)
File Type: ex4 !Zero Lag MACD with Div.ex4   21 KB | 608 downloads
hi guys,

Nice thread you have here Jiva, ive been running this through Forex tester and so far the expectancy is very high, the only thing that concerns me is how the results could differ on a live account due to slippage but I guess theres only one way to find that out.
Could every divergence trade as a divergence?
This is not invariably the case!

Next, let's take a look at an example of some hidden divergence. Once again, let's hop on to the daily chart of USD/CHF.

http://www.babypips.com/school/image...ivergence1.png

Here we see that the pair has been in a downtrend. Notice how price has formed a lower high but the stochastic is printing higher highs.
According to our notes, this is hidden bearish divergence! Hmmm, what should we do? Time to get back in the trend?
Well, if you ain't sure, you can sit back and watch on the sidelines first.

http://www.babypips.com/school/image...rgence-end.png

If you decided to sit that one out, you might be as bald as Professor Xavier because you pulled out all your hair.
Why?
Well the trend continued!
Price bounced from the trend line and eventually dropped almost 2000 pips!
Imagine if you had spotted the divergence and seen that as a potential signal for a continuation of the trend?
Not only would you be sipping those margaritas in the Caribbean, you'd have your own pimpin' yacht to boot!
Previous Lesson Mark Lesson Complete Next Lesson

 

  1. Divergence Trading
  2. Regular Divergence
  3. Hidden Divergence
  4. How To Trade Divergences
  5. Momentum Tricks
  6. 9 Rules for Trading Divergences
  7. Divergence Cheat Sheet
  8. Summary: Divergences


Read more: http://www.babypips.com/school/how-t...#ixzz1NUraMLtZ

Keep in mind that regular divergences are possible signals for trend reversals while hidden divergences signal trend continuation.


Read more: http://www.babypips.com/school/hidde...#ixzz1NV2hXK63

Quoting Waka
Pain has its benefits, even emothional pain. It makes us think twice the next time. Hopefully it will happen again before you move onto a real account, to engrain the feeling into your mind.

Reagrds,

JC
Experienced traders know these things...
Thanks for the support.
It is a major hurdle for successful trading..
Some of us are a little slower than others in getting past this...
The spur of the moment can and does confuse us sometimes. The illusion is very strong. But it is an illusion.
Trading must be approached scientifically to be successful.
The test is when the temptation is presented. Do I throw all my "understanding" and "science" out the window and reach for a "pie in the sky"?

Reminded of a little story:

A dog was dressed up in a king's outfit, fancy crown, royal robes and placed on a thrown and was receiving homage, respect, and had charge of the treasury. He had all success. Someone nearby threw a bone and he jumped down into the mud and dirt to grab it.

So the real test will be when I am faced with this again and I will be...
Probably today. Maybe the very next trade..

Woof?
  • Post #206
  • Quote
  • Edited May 27, 2011 12:37am May 26, 2011 11:58pm | Edited May 27, 2011 12:37am
Quoting jmw1970
Hi All/Jiva

like many I get confused with divergence and constantly switching the rules about in my head (so many things to know in forex, so little space in my brain!!)

therefore I always have indi's to help, I have recoded the zero lag MACD to also plot divergence.

to make it easier the defaults are based on the 5/10/5 macd, though everything can be changed.

a little picture below to help people visualise what i have done

Regards
John
Really, Really nice work. I think we are onto something.....
Quoting rumpfunk
hi guys,

Nice thread you have here Jiva, ive been running this through Forex tester and so far the expectancy is very high, the only thing that concerns me is how the results could differ on a live account due to slippage but I guess theres only one way to find that out.
yup. and good luck. keep us posted..
Quoting Forexcube
Could every divergence trade as a divergence?
This is not invariably the case!

Next, let's take a look at an example of some hidden divergence. Once again, let's hop on to the daily chart of USD/CHF....
talk about scientific approach to trading.
great resources. thanks a million..
1min +3
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This type of market, ranging, consolidating, swinging look for
regular divergence.
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jiva34 what ea are you using to open and close your trades so fast thanks
This is going to sound weird but I am very proud of myself for taking this loss.. even though the candles went higher after a while. The trade didn't go as I had expected, too much risk...

1min -5.65
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Quoting walb99
as long as 4210 holds a major breakout to the upside is possible above 4250
As bad as the EUR is, the USD is in the hopper...
Quoting gmain
jiva34 what ea are you using to open and close your trades so fast thanks
good broker, fast mouse...
1min +3.4

I've got the reg negative divergence entries down pretty good.
This weekend will study up on hidden divergence to see how to catch the continuation moves, which tend be a bit bigger..

great contributions to the thread, you all...
great great great...
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took another loss 1min -20
tried to stay in too long..
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For the sake of simplicity.
what I am going to do is just trade the one strategy reg divergence using the zerolagMACD in the one account.
This will be for markets that are ranging.

Most likely opening another account and possibly another thread for hidden divergence.
1min +2.3

Keep it simple
stay focused
don't overstay the welcome, quick in and out..
honor stops
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1min +2
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1min +5.9

It's a "one trick pony" but hell it works....
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